Why the Dow Lacked Staying Power

While the markets started off strong, investors ended up with just another disappointing performance.

China got the bulls started by cutting its rates last night for the first time in four years to prevent economic growth from stalling out in the Middle Kingdom. And then Federal Reserve Chairman Ben Bernanke's testimony in front of Congress put the markets under a cold shower. After Dennis Lockhart, the president of the Atlanta Fed, made comments that "further monetary actions to support the recovery will certainly need to be considered," hope for a decisive plan during today's testimony skyrocketed. Bernanke is clearly unhappy with the economy, yet he doesn't appear ready to put on his Superman cape and save the day. Not all hope is lost for near-term support from the Fed, though, as there will be another meeting later this month.

That said, let's take a closer look at where the three major indexes closed and drill down on a few stocks dominating the headlines.

The Dow had been up 140 points intraday before retreating to its modest gain; however, it outperformed the Nasdaq's nearly half-percentage-point decline. The biggest news item on the Dow belonged to health-care component Pfizer (NYS: PFE) , which announced that it will spin off its animal-health unit into a new company called Zoetis. The spinoff won't happen until July of next year, and not every shareholder will get a piece of the new company: Pfizer will IPO a minority position in Zoetis and then sell off the rest over time. After selling its nutrition business to Nestle for nearly $12 billion, Pfizer isn't in need of the cash now, but this gives it the chance to easily raise additional funds when desired while focusing on becoming more of a pharmaceutical pure-play.

In related news, Molina Healthcare's (NYS: MOH) 31% plunge made it today's worst performer on the New York Stock Exchange. Higher-than-anticipated claims from Hidalgo and El Paso caused the insurer to yank its profit forecast while planning on increasing premiums. While there are concerns over Molina's profitability going forward, investors confident in their thesis had apparently only a small window to use the massive sell-off to their advantage. After hours, it appears Molina has won back its contract for Ohio's Medicaid business, sending shares soaring 19%.

Pharmacyclics (NAS: PCYC) was the sector's top performer with a 6% increase, as excitement over its lymphoma/leukemia treatment ibrutinib continues to gain momentum. One Wall Street analyst went so far as to predict 2024 peak sales of $2.7 billion. Before counting dollar signs, though, please remember tht this drug is not even in phase 3 trials yet; a lot could go wrong in the meantime. However, Pharmacyclics is certainly one to add to your Watchlist as it and partner Johnson & Johnson (NYS: JNJ) continue to advance the potential blockbuster.

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